Why crowdsourcing makes sense for startups

Finding that funding to get your business up and running can be problematic, more than that, it can be a downright impossibility; you’ve rolled that boulder halfway up the hill only to have it come tumbling back down. What’s pushing it back down: banks that are wary of newbie businesses with no track record or collateral, for one. How about private investors who might be willing to offer up some capital but only for an inordinate equity share. Or what about the prospect of maxing out credit cards only to dig yourself into a bottomless hole of debt. There has to be a way to push this boulder that is your new business all the way to the pinnacle of that hill…Enter: Crowdsourcing.

The relative ‘smallness’ of our world given the domination of all things digital, has made crowdfunding a very real and potentially business-saving possibility. You don’t have to have a proven track record, you don’t have to sign over your firstborn in order to procure the necessary money for your startup, you just have to be able to connect to regular, everyday joes and janes. Let the crowdsourcing fun begin!

Prepare, prepare, prepare!

From Kickstarter to Indiegogo there are a number of emergent crowdsourcing platforms out there. So good news, there’s bound to be one that accommodates your company’s particular niche perfectly. However, before you go diving off into the crowdfunding waters, you need to have a game plan. Creating a cohesive, attractive and relatable campaign is everything. Understand the audience you’re targeting and work from there. Once you’ve developed a killer campaign (and btw, tapping freelancers as resources here might be a smart move) then you’re ready to hit the ground running.

You Get to Pitch to Millions, Not Just a Skeptical Few

Here’s the tremendous part of crowdfunding sites and channels, you are spreading your brand’s message to the world. It’s not just you, sitting nervously, awkwardly and uncomfortable before a loan officer or two—it’s you telling the entire world wide web why your product, your service, your idea is so great. This is simple math really…One or two people may not agree with you, they may reject your idea and thus, meeting done, door slammed in your face. But now with thousands, nay millions before you, you are bound to strike a chord with a healthy handful of aspiring investors.

You Can Actually Pre-Sell Your Product

Even if your venture isn’t officially launched, by starting a crowdfunding campaign you have the opportunity to engage in what is known as a Reward-based approach. This basically means that for a certain dollar value invested, the person receives some sort of tangible “reward.” Now of course, the trick here is to leverage this gift so that it gains you greater exposure, generates a buzz around your brand and gets people actually using and talking about you as that exciting new company to watch.

It Allows You to Fine Tune and Tweak as Needed

With this early crowdfunding exposure, you have a chance to experiment a bit. Perhaps your product does need a little finetuning. Maybe you want to test the waters with a couple of different prototypes. Think of your crowdfunding campaign as a blank canvas of sorts. See what works, what people respond to, and you can also extend this logic to your marketing efforts during this crowdsourcing phase as well. Platforms like Kickstarter do give you an opportunity to include videos, bios, profiles, marketing messages. If one doesn’t happen to be performing particularly well, switch it up and try something new. In some ways, this could be considered a set of training wheels for your business.

Any Stigma Has All but Disappeared

In the early days of crowdsourcing, it was often thought that a business that wouldn’t be interesting to “real” investors or actual banks, and thus had to turn to alternative means of funding, was not a business you wanted to be in bed with.Things have certainly changed. As crowdsourcing sites have gradually and firmly gained traction, their reputation has also concretized. It’s no longer a questionable means of raising capital, but rather, it is now an incredibly valid one. In fact, startups who succeed in creating a profitable crowdfunding campaign are often lauded as potential superstars.

So should you try a crowdsourcing campaign to fund your startup…absolutely! And if you are uncertain of how to begin, or exactlly what types of materials you need to create to guarantee that successful end result, why not enlist the help of talented freelancers. This is your one shot after all—make it count!